2023-11-29 21:21:00
President-elect Javier Milei announced that he will close the Ministry of Internal Trade, currently led by Matías Tombolini. “Obviously, you don’t have to be doing that thing of regulating prices, that seems like an aberration to me,” said the libertarian.
The leader of La Libertad Avanza stated in dialogue with The Observer 107.9: “It will not exist in the sense that governments historically gave it. All the prices I can from the economy, I’m going to release. There are some who still cannot do it due to the characteristics of the bombs that the Government planted.”
In this way, programs such as Fair Prices would end, which currently sets prices for about 2,000 products in the basic basket and places a cap on monthly increases on others. 50.000.
Milei responded to the governors about the bonus: “Cut other expenses”
The position of economists
In this regard, Guido Zack, economic director of Fundar, said: “Within the framework of a stabilization plan that generates macroeconomic consistency, making price and wage agreements, what is commonly known as income policy, can obviously be useful in several ways. Firstly, because the alignment of relative prices, that is, increasing the official exchange rate and rates, is very inflationary, and the way to reduce the inflationary impact of these measures, both immediately and also limit it over time, is with price and wage agreements, with income policy. So, in that sense, it would be desirable for some public body to fulfill that function.”
“Naturally, it should be the Ministry of Internal Trade, but if it eliminates it, let’s hope there is another public agency in charge of this,” he added.
However, Zack questioned the current role of the organization: “Inflation cannot be lowered solely and exclusively through price agreements. In that sense, If at any time there was any expectation that this would lower inflation, it was obviously not going to be the case. “Which does not mean that it cannot play some role within the framework of a stabilization plan.”
Along the same lines, Rocío Bisang, economist at EcoGo, stated: “Although price control policies can be useful if they are considered for a limited period and accompanied by other measures, in themselves they are a patch that does not solve the problem. and in the long run they generate a strong distortion of relative prices and incentives”.
“Today we are beginning to see the disarmament of these price policies, between an outgoing government that no longer has the capacity to apply and an incoming one that is not expected to sustain those policies. That explains, to a large extent, the strong correction in prices of food and other products such as medicines or fuels that we saw this week, and we hope to continue seeing in the coming weeks,” he added.
On the other hand, Hernán Letcher, director of the Center for Argentine Political Economy (CEPA), said that the inflation that some call ‘repressed’ by price agreements would be between 40% y 60% and that also depends on what happens with the evolution of the exchange rate. For Letcher, a non-pricing policy would imply:
• End of the Fair Prices program
• End of the Oil Trust
• End of the Wheat Trust
• End of the quota policy: corn, wheat and meat
• Fuel deregulation
• Rate deregulation (electricity, gas, water)
• Telecommunications deregulation
• Repeal of the Rental Law
The view of the commercial sector
For his part, Mario Grinman, president of the Argentine Chamber of Commerce (CAC), told PERFIL: “We consider that the important thing is to have a valid interlocutor when being able to approach the Government with proposals and make efforts in pursuit of the sector that we represent. We don’t care too much if that department is called the Secretary of Commerce or has another name that the incoming administration deems more appropriate. “The important thing is that it efficiently meets the objective of promoting the growth of a key activity for the national economy, such as Commerce and Services in general.”
Javier Milei confirmed Luis Caputo as Minister of Economy
“In the last times, The Ministry of Commerce, as happened at other times in our history, unfortunately was more focused on agreements or price controls than on promoting the development of the sector.. From the CAC, we have repeatedly pointed out that Inflation is not resolved with price freezes or similar actionswhich have demonstrated their failure throughout the history of humanity, but with consistent policies in fiscal and monetary matters,” he added.
“The inauguration of President Milei, with the important changes that are announced in terms of the government organization chart, is an opportunity to reconfigure the area in question so that it focuses on promoting the development of private initiative, the true engine of economic and social progress in nations, removing unnecessary obstacles,” he considered.
The Ministry of Commerce today
The Secretariat of Commerce functions within the organizational chart of the Ministry of Economy and is the body that, according to official information, works on the formulation and execution of trade policy and implements trade measures aimed at improving the organization of the markets for public goods and services and private.
Likewise, it designs consumer and competition defense policies and supervises the management of foreign trade in coordination with other competent areas.
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